Wage, tax costs thwart foreign investment
1 July 2005, BRUSSELS — Some 5,547 jobs were stimulated in Belgium last year by foreign investment, representing a strong increase on the 3,586 jobs created in 2003.
1 July 2005
BRUSSELS — Some 5,547 jobs were stimulated in Belgium last year by foreign investment, representing a strong increase on the 3,586 jobs created in 2003.
However, in comparison with other European countries, Belgium ranks a lowly 13th when it comes to job growth created by foreign investment.
High wage and tax costs are considered the biggest impediments to foreign investment in Belgium, newspaper 'De Tijd' reported on Friday.
The figures were compiled by Ernst & Young, which studied for the second year in a row Belgium's attractiveness for foreign investment.
Investment usually occurs in the form of expansions in existing operations or the opening of a new branch. A small percentage involves investment via a takeover, the buying of shares or the construction of a new location.
Belgium attracted 107 foreign investments last year or 3.7 percent of the total number of investments recorded (2,885). In 2003, there were 76 foreign investments out of a total of 1,931, accounting for 3.9 percent.
Consequently, Belgium fell from 8th to 9th place in terms of the total number of foreign investments. However, an Ernst & Young analyst said the figures could not be compared because the method of calculation was changed.
Vlerick management school professor Koen de Backer stressed that the job growth figures are a better indication of foreign investment.
Despite the gross increase in jobs growth — 5,543 last year compared with 3,586 in 2003 — De Backer also warned that many more jobs could have been scrapped at existing foreign companies.
A survey of 627 business leaders indicated high labour and tax costs are the biggest factor preventing foreign investment in Belgium. Inflexible labour laws and the difficulty in obtaining government subsidies are also a bane to foreign firms.
On the other hand, Belgium's high quality of life, its quality supply of labour and telecoms infrastructure are highly praised by foreign investors.
However, the study also revealed international companies encounter difficulties trying to get information from the Belgian government. They generally opt instead to seek information from employers and industry groups.
[Copyright Expatica News 2005]
Subject: Belgian news